Dara McClellan, a live-in employee since 2007, says Lupin’s husband-and-wife proprietors, Glyn and Lori Kay Stout, had her work 30 hours a week in exchange for food and lodging.

But McClellan claims she never signed a written agreement and never got overtime, meal breaks, compensation for a lack of meal breaks or reimbursement for any expenses. She further alleges that she never earned actual wages, endured legally substandard housing and that the room-and-board arrangement evened out to less than the statewide minimum wage.

The class action lawsuit filed Friday in Santa Clara County Superior Court has identified at least 35 others who worked under similar conditions. It demands a jury trial, injunctive relief, back pay and compensation for legal fees. The Stouts, who also face felony water theft charges in criminal court, have yet to return requests for comment.

San Jose Inside reported on the illegal living and work conditions at Lupin in July, which prompted some of the residents to seek legal help. The resort has been sued in the past for violating labor laws.

“This is one of the worst cases I’ve ever seen,” McClellan’s lawyer Amy Carlson says. “It’s horrible … these people are stuck, they have no money, nothing for a deposit to move anywhere else, and they’re afraid to say anything because they don’t want to be homeless. To me, that is human trafficking.”

The lawsuit also names Charles Perkins (no relation to the Los Gatos attorney of the same name), Michael Fjelstad and Bradley Chibos as defendants. Two of those three—Fjelstad and Chibos—are practicing attorneys who sit on Lupin’s board of directors and, according to McClellan’s claim, knew full well about worker exploitation yet did nothing to prevent it.

Like dozens of others, McClellan, a single mother, moved to Lupin about seven years ago in response to a job ad promising work in exchange for a home in a forested paradise. As of Tuesday, she was still working in the resort restaurant as a dishwasher.

Lupin owners Lori Kay and Glyn run what’s essentially a 110-acre hotel-style campground, where guests can rent out yurts, cabins or tents. Resident workers like McClellan are placed in trailers or cabins and charged monthly membership fees up to $450 or more—far above the price advertised online—in addition to market-rate rents. Those monthly rents and "membership" fees, however, were a moving target for live-in workers.

In 2011 or 2012, according to the suit, the Stouts announced that all workers from then on out would be considered independent contractors. But they continued to hire, fire, discipline, supervise, schedule and set compensation, as though they were on payroll. Much of the work involves manual labor or kitchen duty.

“This informal system was never reduced to a voluntary written agreement,” the lawsuit notes.

While well-heeled guests of the mountain resort spend weekends in hotel-like accommodations, the workers live in dangerous and legally substandard housing. McClellan and others have been too afraid to complain about the gutted trailers, rotted-out cabins, rat nests, faulty plumbing and electrical wiring, no insulation or heat.

"[T]he housing provided as a substitute for earned wages had very little to no 'value' as the housing was not 'adequate, decent and sanitary according to usual and customary standards' for hospitality workers," the lawsuit states.

The county's Department of Planning and Development has cited Lupin in the past for housing violations, including renting out an old rabbit hutch (pictured below right) to a resident worker.

Source: Santa Clara County Department of Planning and Development

“They’re afraid to speak up because they have nowhere else to go,” says Carlson, a partner at Employment Rights Attorneys.

According to residents, the Stouts recently installed security cameras—usually frowned upon in a nudist camp—to keep an eye on workers.

They also control the mail, according to the people who live there. Unlike, say, an apartment complex, where a U.S. Post Office worker will deliver to individual numbered boxes, all correspondence goes to the main office. That means people may not be receiving court and jury summonses, notices of renewal for government IDs or forms to sign up for a class action lawsuit.

For years, Lupin has evicted workers who conflict with management, sometimes over petty disagreements. In the unlawful detainer lawsuits, the Stouts claim that the employee stopped working, thus stopped paying rent and had to leave. In one instance, an elderly woman forced out of her cabin set up camp in the forest because she didn't want to live in a homeless shelter and had no money to room anywhere else. In other cases, according to several jilted workers who spoke to San Jose Inside, the Stouts withheld food from workers, forcing them to pick up groceries at a local food bank.

"The work arrangement is such that the employees depend on them for everything—housing, food and a roof over their heads," one resident tells San Jose Inside. "Total dependence. So if you call them out on anything, you lose it all."

Tomas Margain, an attorney with Justice at Work Law Group who helped Carlson with the case, compared the situation to conditions faced by migrant farm workers.

“I’ve been doing primarily wage theft cases for 18 years,” says Margain, a member of the county's Wage Theft Coalition, “and this is particularly egregious.”

In 2002, a former maintenance manager sued Lupin for thousands of hours of unpaid overtime. Charles Nail, who worked at the resort for six years starting in 1996, claimed he was owed for 1,000 hours of double time and 3,960 hours of time-and-half pay. The Labor Commissioner's Office agreed and issued a $150,000 judgment against Lupin a year later.

Five years later, Carlson represented former Lupin cook Jean Farmer, who claimed the lodge owed her $70,000 in unpaid wages and overtime. In that case, the Stouts settled.

29 Comments

Today is October 3, 2016. I was hired on September 7, 2016 to be Lori Kay Stout’s Au Pair. They put me in the office to work with Marty Shumway, who has been verbally abusive, mockery, and belligerent towards me from the first I started working here. I complained about Marty Shumway’s treatment towards me, and the complaints from guests and residents here. Lori Stout, the owner, (Glyn Stout died in Nov. 2015), told me that she knows. On September 29, 2016, I was told to leave the office after Marty Shumway came in on her day off.

I wrote another detailed email to Lori Stout about the abuse I was getting, and asked what the reasons were for the dismissal. Lori Stout said she would talk with the advisory board.

On Oct. 2, 2016, I saw Lori Stout as I was walking to the restroom, as she gave me papers of my time cards and a check for $74. I worked 2.5 weeks and have lived in a dirty yurt which I keep vacuuming. I had to clean toilets, work in the kitchen and office work.

I was charged for food, I did not eat, a yurt, water, electricity.

There are people doing hard drugs here, and a female that has regular sex with constant knocks at her door from men. I am next to her, so I have to hear her skanky moans. I wear ear plugs to drown it out. I told the office staff, and they said they know about her.

“They’re afraid to speak up because they have nowhere else to go,” says Carlson, a partner at Employment Rights Attorneys.

Baloney. Lawyers smell easy money, and now they’ll get their cut at the expense of the plaintiffs.

Because there is someplace else they can go: the Wage Commissioner, who leans heavily toward employees in any wage dispute. This sort of situation is exactly what the Wage Commissioner is for. There is no cost to file a wage complaint, and the recovery would probably be about the same. Their net would undoubtedly be higher.

I also note the one-sidedness of this article. Jennifer Wadsworth doesn’t interview the employers. Not that I have a dog in this fight; I wear clothes. But all the quotes are from people demonizing others — who weren’t interviewed!

Finally, I have no sympathy based on what I’ve read here. These people did, in fact, have a choice: they could have taken a few community college courses in a field that’s in demand by local employers, and gotten better paying jobs. You know, just like everyone else is expected to do. No one was forcing them to stay there, it was their own choice.

Hey, maybe the folks running this lodge are nasty people to work for. So what? The stand-up thing to do is to go and get a better job, just like the rest of us would do. But I do have to larf at their lawyering up. Now they’ll have to give a one-third cut to the lawyers — when the Wage Commissioner would have given them 100.0%.

the wage commissioner can’t handle huge cases like this that is why it is a class action lawsuit everyone is involved and obviously it is the owner own fault for not dealing with this like a proper owner would otherwise there would be no lawsuit

Why can’t the Wage Commissioner handle cases like this? That’s their remit. Of course they can handle cases like this, they do it all the time.

And this is hardly a “huge case”. It is a typical ‘pay for work performed’ case.

I know a little about the Wage Commissioner. A few years ago I filed a complaint. It was easy-peasy, and after producing some minor documents I was awarded more than $36,000.

I don’t think lawyers like the Wage Commissioner because the WC’s office does what lawyers do — but they do it at no charge. The complainant get 100% of any award. And from personal experience, the WC is more generous than a typical jury.

I totally agree with you and was thinking the same thing, get a job like anyone else who isn’t paid by an employer would. I have also been there many times and I’m telling you those employees knew the deal and agreed to it.And they weren’t living a high and mighty life before like the people with the big bucks who stayed there. I get labor laws are needed, but they’re jumping on the water issue wagon to sue and the owners aren’t living a luxurious life either! Not saying any of it is ok or right, but to say they were trafficked and stuck is nuts. So glad I don’t live in a sue happy state anymore!

Hi I worked there for three years, never been paid, worked my ass off also, cold hungry, without, had a raised a baby somehow through the mess, such a beautiful place and really good people really draw you into it, I wanted to die of old age there,but yes very hard times as well,

Instead of building low income hi-rises down town, lets reopen the bus line VTA 76 to Section 8- Lupin Lodge.
That should solve 4 problems, more work for the VTA ,Jobs for homeless, and a place to stay.

It’d have to be done on public property. We should use either the underutilized Grant Ranch or further up the hill, the old Boys Ranch (which I think is now a fire station of some sort) I guess a good Santa Cruz Mountains option might be the old airbase at Mt Uhminum.

I lived right above Lupin for a spell growing up. Next street up the hill is Laurel. My options for getting to LGHS was fairly limited. The elevation gains are what kill you (Kills cars too)

Your two choices are, walk up Aldacroft Heights road, down old Santa Cruz to HWY 17. This is probably the fastest route, because the Alternate (I think it’s Alma Bridge around the east side of the reservoir) is longer, with more up/down hill climbing to do. No water (except creek) and no restrooms. I’d routinely cruise my 10 speed right on 17. Do what you gotta do to get to school I guess.

A few years back VTA line 76 was an option from Old Santa Cruz, but the line has been shut down. Was a fun run though. On days I could make it to the bus stop on time, on the way back I’d have them drop me off at Summit and Old Santa Cruz. There used to be a pear orchard there, I’d get my fill, then do a downhill skate run from summit to Aldecroft via Old Santa Cruz.

So when you ask, “Are they chained up?” It’s not too far off. More like the terrain keeps you trapped up there, not to mention your friends are going to get sick of burning gas to come get you really fast.

I have no knowledge of this resort or the issue. I can only say being a nudist for many years what I do know. Many of the nudist resorts have volunteer workers that receive membership or other benefits in lieu of membership and rental . The nudist environment is a peaceful loving place most of the time and a family type atmosphere. Those not wanting to live in a nudist environment won’t so I assume she had the desire to live there but not the funds. I also assume the owners were trying to help here live her dream of a nudist lifestyle. I hope they work out there difference. Our lifestyle of peace, love and a closer relationship with the universe and creator has been damaged by those using the environment in a negative way.

I would be sad if Lupin ceased to be. What I see is a lot of uninformed, small minded people jumping on Lupin like a vicious pack of dogs smelling vulnerability as Lupin struggles with issues so it can stay open. Lupin has been operating like this for 50 years. It has been providing staff with food, primitive lodging, places to park a trailor or pitch a tent, and such on a exchange basis and maybe limited compensation for some. Not because of greed but because it was the only way it could survive and be available to all not just a priveleged few. I have never worked on the staff but have known many. It is pretty clear what they are getting into. No one is twisting their arm. They have to be responsible enough to know if the trade off is worth it and doable for them. I have seen many come to work at Lupin for a short time or sometimes for years. It is usuallly because these people are going through some kind of transition in their lives and Lupin provides a safe haven, a unique opportunity, environment and supportive community to work through things compensating Lupin through their contribution of time, skill, and energy. No one is getting rich. With all the challenges Lupin has had both from nature and opportunistic, misguided, uniformed or simply bad natured people it is a wonder it is still surviving. Why would anyone bite the hand that feeds it? I wonder who it will benefit to close it down? Glynn and Lori Kay along with the staff, in my experience, have tried to make it possible for people of all economic statuses to enjoy Lupin. If you do not have the money there is usually something you can contribute in exchange for dues and such. Lupin, from my perspective and experience, is built on high ideals, a dream for a kind of Utopia, a temporary respite from survival mode. A temporary opportunity to shed the mask we show the world freeing us to live our truth or to find it, and to be our joyful, playful, accepting, authentic and vital selves. But there is no such thing as Utipia in this human existance. I am sure mistakes have been made on all sides even when the intent was well meaning. Where there is light there is always shadow lurking near by.
Dear people you have the power to choose the light and help not hinder Lupin.
Start by moving into a better feeling place, then a better feeling place…..
Do not promote negativity, especially relating to things you do not know about. It is poisonous and like spitting in the wind- you always hurt yourself.
Look for the good, for solutions, give issues the benefit of the doubt.
See that you are not a victim, there are always choices.
Look beyond yourself for the greater good.
Take responsibility.
Communicate, communicate, communicate with honesty and integrity.
Support people’s right to choose even if it is a choice you do not agree with.
Listen to your heart, it does not lie, it is the source of compassion, goodness, generosity….
Blessings to all!
Thank you Glyn for your friendship, your stewardship of Lupin, and for holding the vision and creating such a wonderful space for me, my children, and so many. Lupin was an important respite and stepping stone in my life. I would not be who I am without it. You will be missed and remembered fondly! Condolances to Lori Kay and family. May you all heal swiftly!